I am a longtime brand guy - mostly from the client side. I write mostly about smart or foolish things that brands do. I teach branding and social media at NYU and for ThirdWay Brand Trainers. Worked in marketing for Coca-Cola, Johnson & Johnson, DoubleClick and others ...

The Wrong War Over eBooks: Publishers Vs. Libraries

Libraries, like other consumers, should be free to buy any published e-content at competitive prices, to keep these items in their collection, and to loan them to their patrons. Anything less violates basic democratic principles …

Libraries and big six publishers are at war over eBooks: how much they should cost, how they can be lent and who owns them. If you don’t use your public library and assume that this doesn’t affect you, you’re wrong.

In a society where bookstores disappear every day while the number of books available to read has swelled exponentially, libraries will play an ever more crucial role. Even more than in the past, we will depend on libraries of the future to help discover and curate great books. Libraries are already transforming themselves around the country to create more symbiotic relationships with their communities, with book clubs and as work and meeting spaces for local citizens.

For publishers, the library will be the showroom of the future. Ensuring that libraries have continuing access to published titles gives them a chance to meet this role, but an important obstacle remains: how eBooks are obtained by libraries.

This column is the first in a two-part series about libraries and their role in the marketing and readership of books. This first part addresses the present conflict. The second part will look forward to the future for libraries and publishers and the important challenges that they must address.

The solution to the current pricing problem lies in understanding that the argument publishers and libraries are having is the wrong argument. It is based on the paradigm of the printed book and as such presents a series of intractable challenges for both publishers and libraries. By changing the model for pricing an eBook, both parties could find a clear and equitable resolution to the current impasse.

The Issue

Do libraries increase book sales or cannibalize them? This is the issue at the heart of the struggle between libraries represented by the American Library Association (whose president is Maureen Sullivan) and the Big Six publishers.

The current struggle is taking place in a landscape that will be familiar to those who followed the travails of the music industry over the last decade. Publishing is changing dramatically as it tries to cope with the rise of eBooks and the increasing power of Amazon, the decline of bookstores and a flood of low-priced indie titles. In spite of the good year that Random House is experiencing (anticipating a merger with Penguin and just having paid employees a $5,000 bonus each thanks to the success of once-indie author EL James’ Fifty Shades trilogy), most publishers have found it difficult to maintain sales and profitability in the current environment. Whether they’re doomed or not is debatable, but no mainstream publisher is comfortable in the current environment.

The landscape is also shifting for libraries. The Information Age has posed numerous challenges to the public library, as Steve Coffman adroitly chronicles in “The Decline and Fall of the Library Empire.” Libraries have struggled to understand their role in communities as technology has changed. In addition to encouraging children to read and lending books, they have migrated from providing access to online databases to cataloging the web then providing computer terminals and now broadband access as the needs of the citizenry for information has changed. The shift in reading towards eBooks presents a particular problem for them because it’s happening with startling rapidity and presents significant technological challenges.

In addition to the central issue of pricing, libraries are struggling with the copyright implications of eBooks, their role as curators and promoters of reading in an age where publishing is exploding, dealing with technology intermediaries and gaining access to the newly available wealth of self-published works.

The Library Perspective

The central issue for libraries is simple: they believe that withholding eBooks from libraries entirely, pricing them higher or limiting lends all undermine the library’s core mission. Robin Nesbit, of the Columbus (OH) Metropolitan Library System told me that although her eBook circulation of 500,000 lends annually is only 3 percent of the system’s total, that number is growing by more than 200% a year. “Plus it’s at least 10% of our budget.” Between the cost of eBooks and a technology component, providing access to eBooks is three times as expensive for her as physical books.

This pricing pressure is significant and it’s being felt across the country. Jamie LaRue, Director of the Douglas County Libraries in Colorado told me that,

I saw a decrease in use that was hard to explain because our libraries are busy. Then I looked at our inventory and realized that the problem is that as we shift our dollars to eBooks, I am buying fewer items because the prices are so much higher.

The challenge to libraries is not insignificant. Four of the six publishers are not providing eBooks to libraries at any price. The other two – Random House and HarperCollins lead the industry with two different models. Random House adjusted eBook pricing in 2012. While the prices on some books were lowered, the most popular titles increased in price – some dramatically. Author Justin Cronin’s post-apocalyptic bestseller “The Twelve” whose print edition costs the Douglas County Libraries $15.51 from Baker & Taylor and whose eBook is priced at $9.99 on Amazon was priced at $84 to Douglas County on October 31st.

HarperCollins meanwhile has adopted a different model, selling eBooks to libraries at consumer prices but electronically limiting them to 26 lends and then requiring that the book be repurchased. Robin Nesbitt sees this as fairer to libraries, but she points out that it’s still much more expensive than print books, “I get forty to fifty lends from a bestseller in library binding. But at least they’re playing.”

And that’s the bigger problem. As detailed below, the rest of the Big Six aren’t playing – at least not nationally. That’s a big warning sign for libraries, as fully 80% of lends – and an important part of their traffic – comes from bestsellers. While it seems likely that most of the other publishers will eventually play, the terms may be worse than those offered by Random House and HarperCollins.

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The real risk is to the public good — libraries are the only public institutions that offer access to information and ideas at no direct cost as a public good. In the info age, libraries are more essential than ever — and if libraries can’t obtain and lend eBooks, libraries will fail at fulfilling its public good mission. Glad to see the depth in this article.

I did a talk on this topic to SXSWi this year — here’s a short version I did for a local Ignite: http://www.youtube.com/watch?v=VrFB25VFatE

This is the most comprehensive and interesting post about the library issue I’ve seen anywhere, Mr. V. You’ve raised some thought-provoking concepts here. My take on the local library has always leaned toward arcane research and/or non-fiction needs. I buy all my pleasure reading at the bookstore and try to get autographed editions of books I really like. My personal library overflows in stacks all over the house. The maid complains.

My reluctant incursion into the Kindle world is gaining steam though. I’ve read many ebooks just for the convenience. I have an autographed hardback of Lee Child’s most recent book along with an e-copy.

As our methods of reading evolve, so will the way we acquire books. The attraction of bookstores over libraries could evaporate. Then your point about the “war” will escalate.

Very interesting points. I wonder where the industry (and I, the consumer) will go.

One thing that is going to kill the Big 6 publishers is the ridiculous price of blockbuster ebooks. $12.99 for an ebook when I can get & keep the hardback for $15 at Costco? They’re thinking like the music industry did in the 3 years before the end.

First, about the library mission: our job is to gather, organize, and present to the public the intellectual content of our culture. “Gathering” is acquisition, leveraging the cooperative purchasing agreement of the public library to buy what is far beyond the reach of individuals. There are many publishers beyond the Big 5. And we’ve found hundreds more than willing to sell (not license) their content to us at discount. At that, it’s a bargain. Publishers pay some bookstores for prime retail space, yes? That’s precisely what we are: marketers of intellectual content.

Second, about requiring people to come to libraries to use online products. That’s like requiring people to go to Target to shop on Amazon. Libraries have long had “digital branches,” where we offer, for instance, business people online access to investment or market data we subscribe to on the public’s behalf. Businesses too are paying members of our library. Not all people use the library the same way. Offering some content online only is just demonstrating the value we add. So the digital branch becomes another part of our brand. It doesn’t make sense to base our business model on customer inconvenience.

Thanks so much again for your contribution to this column. I plan to discuss the “mission” for libraries as well as the issues for the future in the follow-up to this column. That’s where I will discuss the publishers beyond the Big Six (soon to be Five). I agree that the dynamics for those publishers as well as the hundreds of thousands of independent authors currently self-publishing are vastly different from the Big Six.

I think your comparison between Target and Amazon is unfortunate because it’s just the fate that retail stores are experiencing that libraries must avoid. The important distinction is that libraries are giving something away for free, so there is a different value exchange that might warrant that visit. I don’t honestly know if it would work, but I think this is one area that needs more research and experimentation before firm conclusions are drawn.

Thank you for adding your thoughtful commentary to the eBook & libraries discussion.

By creating an additional barrier for digital users, such as requiring a trip to the library to download, would likely resulting in most users opting to pay for the convenience of downloading remotely at their leisure. I am even more challenged by the idea that we must drive people to the library to discover what we have to offer.

As you pointed out, libraries have created symbiotic relationships with their communities. Many of these relationships exist exclusive of our buildings as Mr. LaRue indicated. In addition to our digital and virtual offerings, many libraries provide services at the point of need. This might be the local coffee shop, the chamber of commerce at City Hall, daycare centers and pop up locations at the mall. Although we are married to the idea of the library as a specific location, people can experience, engage and encounter the library pretty much anywhere. The buildings are another integral and equally important component of the library experience, but not always central to it.

I’m interested in this question of remote access and the observations made by other library professionals that some library systems serve vast and remote regions is persuasive. On the other hand, I still think that for ordinary patrons used to checking physical copies of books out from the library, a visit is not an unfair burden to save $10 to $30 on the price of the book. But I think this is a worthwhile conversation to have.

Please note that Target also sells online so just replace Amazon with Target online. These publishers have a very swollen head and need to be shrunk back to size considering that they can’t roll back tech. Now cost to produce and distribute are way less with e-books, no printing, shipping, returns, etc. They need to adapt rather than dragging their feet.